Is Nifty starting a bigger degree downtrend or is it still buy on dips?

Nifty showed a sharp move on downside from the highs of 10086 made last Friday. After many weeks there was a correction of nearly 100 points that too amidst all the optimism!

 So does it mean we are reversing? No, it is too soon to conclude this unless important support levels are taken out. But as we keep mentioning in our daily equity research reports it is time to stay alert and not complacent which has paid well so far.

Infact, many of the subscribers already knew about the triangle pattern even before it started to form which helped them to buy near supports and sell near resistance levels. But now we should start seeing a trending move soon.

You can also look at the concept of range bound trading strategy I discussed in my last Friday’s video – How to trade Nifty?

Now look at the below hourly chart of Nifty: (shown in morning research before markets opened)

Happened:

Following was mentioned on 9^th August before markets opened in our daily equity research report – The Financial Waves short term update

In short, looking at the faster retracement of last rising segment, break below Bollinger bands support and weakness in broader markets the chances are high of a trending move on downside. Nevertheless, just one day of move is too soon to conclude anything and so move below yesterday’s low near 9950 will further confirm negative outlook. We will stick with existing wave counts as long as 10085 is protected on upside. …… But so far prices have behaved exactly as expected and let see if selling pressure can start building up from here which will catch majority by a surprise! BANG ON!

Happened: Nifty moved precisely as expected and majority are still guessing what is leading this selloff. Prices have moved more than 150 points since we warned and 100 points post the support zone was broken.

So what is next from here? I do not see it buy on dips market but it is rather sell on rallies. Majority are stuck exactly at the wrong levels and selloff has been strong across the board. Avoid catching a low in this market.

“The Financial Waves short term update” is our flagship product that will provide important support and resistance levels, trading methods and charts on Nifty, Bank Nifty, stocks where there is opportunity. To Subscribe visit Pricing Page

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